#1
This is a follow up of sorts to a thread I started earlier asking about the price of a Deluxe Reverb.

Cliff notes for the tl;dr-type: The recession is going to deepen considerably enough that gear-wantin' musicians should postpone purchases for at least a few months, if not a year.

So here's the deal: I obsessively follow used guitar-related prices. Craigslist, eBay, estate/garage sales, all of it. What I've noticed is two-fold: firstly, prices have dropped in the past year, in many cases by a lot; and secondly, listings are taking longer to attract interest. Oh, and third, I'm seeing the tagline, "NEED CASH BY ____ FOR RENT!!! SELL CHEAP!!!" more often than I've ever seen it.

An example: Marshall DSLs, a year, ago, didn't ever seem to sell for less than $700, and those usually had busted reverbs. Now the local store has one for $600 and is willing to provide some servicing, too. If you hawk eBay and Craigslist you can find a DSL100 for around that price, in excellent condition. Now, you might say one could always do this if he got lucky, but never with this frequency or quality.

So this brings up an obvious question: should we postpone unnecessary gear purchases in anticipation of better deals in the future? I think there are a few good reasons that the answer is yes.

1) The recession is gonna get a lot worse. I'm really into econ, so I won't bore everyone with the wonkish details, but this is a very bad recession and unemployment will likely top 10% in a year.

2) High unemployment and low consumer spending hits musicians really hard, meaning the used market is going to be flooded with guys trying to convert their illiquid assets to cash (ie, sell you their guitar stuff to pay that month's rent).

3) Few people really need gear, and when push comes to shove, house/food/child support>>>guitar for 99.999% of the population. All of this points to better buying buying opportunities down the road as people get backed up against the wall and have to sell gear.

I know it seems heartless to think like this, but I think if your goal is to get yourself the nicest gear you can at the lowest price - and hell yeah that's what everyone here wants whether they'll admit it or not - then you should wait to buy.

I'm really curious whether other people have any insight or opinions to share on this. Go!
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#2
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#3
Quote by JBizzle Da Truf
up


Why? We're talking used, btw, not new.
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#4
New gear prices are rising as the dollar falls and used gear should be becoming more available and cheaper
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#5
They'll either go up or stay the same.

In the UK, because the $-£ ratio has dropped from 2:1 to 1:1.35 or so, gear prices that have come from the USA have gone up 35% if I recall.
#6
Tweed, BF, and SF era fenders+Pre-80s Marshalls: Up

Typical Craigslist stuff (Peavey classics, modern fenders): down

So, IMO, the general price of amps is going down, but there are some more collectible amps which will continue to go up.
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Last edited by darkarbiter7 at Mar 9, 2009,
#7
man.
this stuff is complex.
i'm finding that the high end gears are actually going UP because of the recession.
there was a time, a couple of months ago when the high end stuff was cheap because everyone needed money, but now i'm finding that used prices just jumped a LOT because of the economy. All the companies raised their prices for 2009, and now the people selling the used stuff are jacking their prices up because of the larger distance between new and used.
if you get what im saying, they're trying to keep a certain percentage between what they get used and new.
it pretty much sucks.
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#8
Yeah, I guess higher end stuff is going up too.
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Weber MASS Attenuator
#10
Quote by kool98769
man.
this stuff is complex.
i'm finding that the high end gears are actually going UP because of the recession.
there was a time, a couple of months ago when the high end stuff was cheap because everyone needed money, but now i'm finding that used prices just jumped a LOT because of the economy. All the companies raised their prices for 2009, and now the people selling the used stuff are jacking their prices up because of the larger distance between new and used.
if you get what im saying, they're trying to keep a certain percentage between what they get used and new.
it pretty much sucks.


Yeah, I see that psychology at work in a lot of listings, but what I'm seeing with them is that the gear doesn't sell. While in an individual market I wouldn't be surprised to see stable prices, I'd be pretty shocked if nation-wide prices weren't declining for things in the Marshall DSL/TSL, Peavey Classic, new Fender range (basically, amps up to around $2k new in store).

I think the typical "good deal" we see is something along the lines of: guy needs money to pay X by such-and-such date, and you're in the right place at the right time and snag the bargain. There are going to be a lot more down-on-their-luck guys in the next few years, so the only reason I'd think prices wouldn't drop is if the remaining buyers start competing for the right to buy.

I don't understand how you guys can think prices are going to continue increasing. Consumer spending is way the hell down, unemployment is rising significantly, and credit is harder to get a hold of. We're also not talking about baby-steps there, either, but serious contractions. I really should have kept an excel file with all the prices I've been tracking, cause I'm pretty sure we'd see a pronounced decline over the past year.
Want: EH Deluxe Memory Man, Warmoth Strat, Budda Superdrive 45
#11
ive been watching the prices of a handful of used amps recently, and they have been going up.
namely, old SF fenders, mesa lonestars and mesa heartbreakers.
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#12
Quote by bullets34


Cliff notes for the tl;dr-type: The recession is going to deepen considerably enough that gear-wantin' musicians should postpone purchases for at least a few months, if not a year.

This would drive the economy deeper into a recession. Bad idea.
#13
Used market is way soft right now. Buy if you can.
OP is definitely right, this is the time to build your rig. Vintage stuff will usually go up, but has slowed its gains recently overall.
#14
Quote by acdcrocks0323
This would drive the economy deeper into a recession. Bad idea.


From an individual perspective it makes sense to postpone the purchase. From a collective perspective, it's a bad idea. Paradox of thrift.

That's still no reason why individuals shouldn't wait for better deals.
Want: EH Deluxe Memory Man, Warmoth Strat, Budda Superdrive 45
#15
Sorry bullets, I'm going to have to question your level of formal training in economics.

Your hypothesis suggests that you have merely taken a look a the used market, linked that to the general economic slowdown and drawn a conclusion that is very potentially spurious.

I'm not going to go into details, but I'm going to highlight a few aspects you might not have taken into account.
1. Your research methodology suggest you did mostly internet work, have you search other non-traditional means? Face-to-face interviews with a representative sample distribution of used gear sales? That means, methodologically recording all the sales of used gears over a sample time period, including major dealers of used gear and not merely the front line small time players (regular joe on the streets).
2. Have you research ALL the used gear? or just gear that you would be likely to use? What about things like pedals you do not use or wireless systems? What about guitars you don't play?
3. As a sample population, guitars are a minority, what about sales of bass guitars? Drum sets? mics etc?
4. Have you considered the economic theory that prices are historically up-ward sticky but downward inelastic? That means that based on economic theory, prices go up very quickly but are slow to revert to their initial prices when cost of production falls?
5. Have you factored in the fact that cost of production has gone up (less raw material producers around, and all of them need more money to survive) thus accounting for the increase in retail prices.
6. How about accounting for the cost of depreciation in used products?
7. Have you analysed the historical trend of used musical gear during other times of economic slowdowns?
8. How long have you tracked prices of used musical gear?
9. Finally, a serious mistake, are you using historcial data to forecast future performance and price movements? That is immediately spurious data, econometric theory informs us that you cannot use historical data to forecast the future. Any meaning behind such an analysis is spurious and more likely attributable to errors and randomness in the data.

I'm interested to know how solid your analysis is, because your theory goes against the grain of thought, and that means 2 things:

1. You are right, but no one see the trend yet, which suggests a market inefficiency for potential profits; or
2. Your theory's based on guesswork and is spurious.

I'm asking this because you are throwing out journalistic soundbites here and you are not making any reference to true economic indicators. You have not considered what kind of unemployment the United States is facing now, more likely its structural unemployment as well as a mismatch of demand and supply, not accelerated unemployment (which you suggest it to be).

Just so you know detailed records of prices of some guitar gear is not indicative of the market for used gear as you have not adjusted for errors in your sampling size before analysing the trend, so its impossible to proclaim you foresee a downward trend in gear prices in the future, because prices might just revert to mean thus adjusting for the errors dues to dissemination of information.

If you can honestly answer my questions without flinching, then I think you ought to start hoarding gear, because if you are right, you could make a tidy profit when guitar gear jumps in prices again.
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Last edited by ragingkitty at Mar 9, 2009,
#17
Quote by acdcrocks0323
^That whole thing was quite spurrious.

Also, don't ask about sampling bass guitars and drums and pedals and mics when the title CLEARLY states "Where do you think the AMP prices are heading?"


Of course its spurious, when you don't make an effort to understand it.

To assume that amp prices are one thing against the whole used market is quite a flaw.

In any case, I'm really not arsed about whether his data is significant or not. I'm not at all affected by whether your used gear prices go up or down, as seeing there is no used gear where I am.
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#18
Quote by ragingkitty

1. Your research methodology suggest you did mostly internet work, have you search other non-traditional means? Face-to-face interviews with a representative sample distribution of used gear sales?


This is an attempt at humor, right? "Research methodology"? I look at Craigslist's listings, eBay, and go to guitar stores. This is Ultimate Guitar, you realize, and I'm not writing my thesis. Also, I'm not clear on how I can conduct face-to-face interviews with used gear sales. Sounds impossible, if not at least uncomfortable, to me.

The attempt at condescension would have been more effective had you not made so many grammatical errors. -1

Quote by ragingkitty
2. Have you research ALL the used gear? or just gear that you would be likely to use? What about things like pedals you do not use or wireless systems? What about guitars you don't play?


Read the title. It's about amps. -2

Quote by ragingkitty
3. As a sample population, guitars are a minority, what about sales of bass guitars? Drum sets? mics etc?


Again, see title.

In any case, I would imagine the price trajectory of used gear to follow similar paths. Just as used car prices tank in recessions, I'd expect used musical equipment to. It would certainly be nice to see data about it, but lack of data doesn't invalidate the idea, which inherently makes a lot of sense. What I would like to hear are reasons why used gear would rise in price.

Quote by ragingkitty
4. Have you considered the economic theory that prices are historically up-ward sticky but downward inelastic? That means that based on economic theory, prices go up very quickly but are slow to revert to their initial prices when cost of production falls?


This is true (in the sense that economic theories are "true"), but it also doesn't invalidate the idea of the post at all. As household budgets become less robust, demand for unnecessary and extraneous goods like musical equipment will drop. And as people drop into the need-to-pay-the-bills-by-Sunday territory, they will likely look at the amp, or couch, or whatever sitting there and taking up space and think, "I can get a few bucks for this thing."

Quote by ragingkitty
5. Have you factored in the fact that cost of production has gone up (less raw material producers around, and all of them need more money to survive) thus accounting for the increase in retail prices.


Ok, so again, we're talking about the used market. The meaning of cost-of-production changes dramatically for used items, since now it becomes a measure of the restocking rate (if sales of new items drop, you get fewer used ones obv) and only in that sense affects the price.

Rather than fish around trying to get your point, I'll just ask: what's your point? That used prices will rise because new prices rose? If that's the case, I'll respond as I did before: no one "needs" a guitar, especially not now with the uncertainty in the economy, so stubborn sellers aren't going to sell, period. Check used eBay listings or watch Craigslist and you can see clearly that snobbish (high-price) sellers are not making sales.

And lastly, sales of consumer goods at places from Target to Costco have tanked. Are you seriously implying guitar sales are immune from that fall? It's not that I don't think there are good reasons prices might remain high - there are some interesting ideas out there - but they're a lot more speculative and complicated than the mechanism I'm proposing.

Quote by ragingkitty
6. How about accounting for the cost of depreciation in used products?


This is an interesting possibility that I should have mentioned before, but the thing about gear like, say, a tube amp, is that the equipment is unlikely to suffer further depreciation once you get to the needs-new-tubes stage. There are two things that decide price for amps relative to new, within a given product line: cosmetic appearance, and functionality. Simply put, the worse the amp looks, the more of a discount you get. And if it needs new tubes or has a busted reverb tank, you'll also get a discount. But it's tough to make the case that age in and of itself decides prices, especially since that information isn't always even communicated or relevant.

So yes, given the factors that actually matter for determining amp prices, I have incorporated depreciation into my "analysis".

Quote by ragingkitty
7. Have you analysed [sic] the historical trend of used musical gear during other times of economic slowdowns?


You don't need to track music gear specifically, though that would be nice to know. The obvious answer to this question is "no" - I don't think anyone has tracked musical gear prices during recessions. I think it'd make a cool project though.

In any case, durable consumer good prices traditionally fall during recessions, and I see no reason why guitar gear would be exempt.

Quote by ragingkitty
8. How long have you tracked prices of used musical gear?


Amps. This thread is about amps. And the answer is around a year or so.

Quote by ragingkitty
9. Finally, a serious mistake, are you using historcial [sic] data to forecast future performance and price movements? That is immediately spurious data, econometric theory informs us that you cannot use historical data to forecast the future. Any meaning behind such an analysis is spurious and more likely attributable to errors and randomness in the data.


As I clearly stated, there are good reasons to think prices will drop in the future. You either didn't read my post completely or you agree with me, and are merely making theoretical arguments against the position.

What is your projection about the future of gear prices and why? [Yeah, I'll go ahead and extend the thread to all gear, not just amps]
Want: EH Deluxe Memory Man, Warmoth Strat, Budda Superdrive 45
#19
Oh, just a thought.

Calling this a supply and demand problem is not, in my opinion, an oversimplification. This is a very competitive market, with few information asymmetries, and a lot openness. I can't think of any externalities that make this less than a really good approximation to perfect competition (if you can think of them, bring them up).

So here's my view: demand is declining because discretionary budgets have shrunk on the whole. Supply is questionable. On the one hand, it's likely the used market will be boosted by sellers needing the extra cash. On the other hand, some sellers who might have sold if prices were higher will not sell, choosing instead to keep and use the gear.

I'm of the opinion that the second category of seller is less responsible for the bulk of used items than the first, and so supply will likely increase. Since demand is dropping and supply is increasing, prices are going to drop.
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#20
It's obvious that new gear prices are increasing, you can see the threads on here. but i think it's hard not to agree with the OP cause, it makes sense that as more people lose jobs, wages and are generally financially strained, they will sell the wants to afford the needs. gear is a want, food is a need.
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#22
IMO a good deal is a good deal, whether it is today, tomorrow, or yesterday. just remember we are all living on borrowed time and postponing a purchase may make sense to one person, but not another. it is definitely a buyers market right now for used gear, and will probably remain so for awhile.
#23
I have been closely following my local used market for the better part of a year, and my experience has been that there are some great prices out there. I don't have a graph made out for some of the pompous posters on this thread, but it certainly seems like stuff is getting cheaper. I have definitely noticed more items priced lower than I have ever seen them. I have mostly been looking at high-end marshalls, gibson sg's and lp's, and fender tube amp and strats.
I agree with the original poster's observation of cheaper prices and reasons for them. I think the entire market will continue to soften, and now is a great time to buy gear if you can afford it or use it. Especially if you keep a diligent eye on craigslist and have cash to move quickly, you can find awesome deals with very motivated sellers.
#24
Quote by bulletrocks522
This


Do you advocate people not seek out the lowest price they can?
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#25
The reason the prices can go up in a recession is so companies can keep their profit margins. If you were selling half as many amps as before you would need to make twice as much profit per amp to keep the same overall profit. The price of a amp contains the profit and also the other costs such as manufacturing, distribution etc. Thats why prices can rise in a recession but it can also be easier to barter a good deal as I found when I got a large discount on a brand new guitar.
#26
Quote by ShredGod George
New gear prices are rising as the dollar falls and used gear should be becoming more available and cheaper


used seems to be the option of the future if they don't fix the 'recession'.
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#27
Quote by ragingkitty
4. Have you considered the economic theory that prices are historically up-ward sticky but downward inelastic? That means that based on economic theory, prices go up very quickly but are slow to revert to their initial prices when cost of production falls?

7. Have you analysed the historical trend of used musical gear during other times of economic slowdowns?

9. Finally, a serious mistake, are you using historcial data to forecast future performance and price movements? That is immediately spurious data, econometric theory informs us that you cannot use historical data to forecast the future. Any meaning behind such an analysis is spurious and more likely attributable to errors and randomness in the data.


fail?


EDIT: btw my guess is down, at least for a while. No based on any real market value of amps but simply based on the increased frequency of "i need money now" situations as mentioned by the TS. I've seen these go up astronomically in the past 3 months.
Last edited by rnelson at Mar 10, 2009,
#28
It's going nowhere. Although new prices are up a bit, the dollar is worth less so you're only really paying the difference. I don't think the whole used market is changing prices lower, it's just that more people are selling so there are more deals around.
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#29
Also with the state of the economy (In the US that is) prices are down because people need the money and people don't have the money to spend, so it's sell it when and how you can. Also it's the theory of supply and demand, if you see a lot of the same companies they price will go down (used) because no one will pay close to retail value when they can get it cheaper elsewhere. You have to take into consideration the overall worth/value of the instrument, then consider the need/demand for it and what's available/supply, before you can guage the market. Simple economics.

I'm an avid seller. I buy gear used when I find a killer deal, then turn around and sell it for a profit or close to it. For example I had a Taylor 314CE (retails for over $,1600) I paid around $700 for it and sold it for $950. I was able to sell it becuase the value will stay the same and I take care of my gear. Now if I tried selling a Peavey Valveking I wouldn't even get close to half of what I paid.
#30
Quote by bulletrocks522
This


Me going out tomorrow and spending ALL the money in my posession is good for the economy... not good for me. People act in self-interest first, then collective.
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#31
Quote by tubetime86
Me going out tomorrow and spending ALL the money in my posession is good for the economy... not good for me. People act in self-interest first, then collective.


Actually this whole mess of an economy is because people were acting in self interest and spending more money than they could afford, or taking on more debt than they could afford. We just need to pay the piper now for all that stupid spending people have been doing for the last decade or two.
#32
Down for a bit as you stated.

But it is natural for prices to inflate, so I suspect after the recession it will go back up.
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#33
Used amps, like your typical CL stuff is going down. I've witnessed it. I've been looking at tube amps for like 6 months now and can already see more and more "NEED $$$/MUST SELL QUICK&CHEAP!" type things.
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#34
i love all the pseudo-intellectual "ive studied economy" malarkey going on in this thread.
geez, maybe you geniuses should get out of these forums and go change the world with all your enlightened fiscal know-how.
mean while, the rest of us will stay here. when we see a deal, we will jump on it. and like the rest of america, we will continue to be hard workers and tough it out. see ya at the other end of the recession.
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